– but what is the NPSO?
In July 2017 a new body was launched to operate the payment systems between UK banks called the New Payment Systems Operator Ltd or NPSO. It is a Company Limited by Guarantee and is regulated by the Bank of England and the Payment System Regulator. The role of the NPSO is to introduce a New Payments Architecture and universal standards to the UK Payments Sector.
The NPSO describes itself as “the body that will maintain and develop the UK’s payments infrastructure to facilitate the delivery of better payment services in the UK for the benefit of everyone – ensuring the resilience of the economy and promoting innovation and competition.”
Whilst doing this it needs to ensure existing payment methods are supported and continue to flourish. It will be responsible for over 8 billion payments across bank, telephone, online and paper platforms annually, worth over 6 trillion pounds, with the breakdown of payment volumes below reflecting the enormous changes in the payments industry in the last decade:
• Direct Debit: 6 billion
• Telephone and online payments: 1 billion
• Cheques: 447 million
To do this the NPSO has and is bringing together payment organisations as wholly owned subsidiaries of NPSO Ltd to ensure that standards can be applied universally across what were individually operated and diverse companies. Currently it owns:
• Bacs Ltd, (May 1st 2018)
• Faster Payments Ltd, (May 1st, 2018)
• UK Payments Administration (June 1st, 2018)
and will shortly own:
• Cheque & Clearing Company, July 1st, 2018
Card payments are not included in its remit as these are operated by the card schemes such as Visa and Mastercard, nor is SWIFT the interbank settlement system for overseas payments, although a host of additional and supporting services including the Current Account Switching Service and the Paym mobile payment service are included.
At present time NPSO is concentrating on establishing the governance of NPSO Ltd which will include representatives from users as well as banks to ensure it is representative in its structure, and, it is rumoured, selecting a new name for the company by the end of the year!